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Saturday, February 22, 2020

Bitcoin Will Cause the Main Financial System Looking Obsolete Soon

Even though we have seen it plummeted worrisomely in recent months, just like any financial asset which volatility, risk, and return is high due to several factors(i.e. institutional manipulations, lack of history, limited acceptance of the product among various financial system users, underdevelopment of the blockchain transactional system and many others). These are inherit challenges which make the main global traditional transactional system to go on a crusade against the new medium of exchange.

The global traditional transactional system is preferred for now because it has; a history appreciated by its users, trust among institutions and global users, strong government supports, regulatory systems and policies because government is a major player, weaker digitization of the global currency system especially in developing countries makes large adoption sceptical, and lack of digital financial literacy among global users of financial products and systems.

Irrespective of the above justification and observations; global traditional transactional system will go obsolete soon. First of all the high speed breakthrough observe globally in the space of artificial intelligence development, will partly contribute to that to happen. More people will want to have the power of their financial decision making in their hands. Second, proliferation of mobile money platforms that help users to easily complete a transaction with minimum cost and ease. Especially, in Africa where we find high unemployment among the youth. The mobile money is serving as an employment spectrum. The more youth this spectrum employs will twist government policies in favour of the mobile money spectrum. Third, it takes 25 to 50 years for public sector institutions to complete effective change management processes. It is so because most public sector institutions are late adopters of innovation and their services and products lack creativity and innovation. And in recent times some of their regulatory oversight activities were flawed making users of the global traditional financial system becoming transactional and speculative. This has resulted into frequent currency manipulations and trade regimes. In recent times users of the system asked questions and the answers not forthcoming.

So now projecting into the future, let say 10 years; bitcoin and its allies will be most preferred transactional system globally. It is a community that is growing and will be shaped by its history. More people will gradually understand how it is operated and how to use it for their transactions across the globe. It is going to reduce cost and ease of completing transactions. Trust will be built overtime. There will be systems and policies in place to regulate activities across transactions, even though it will be highly decentralized. And lastly artificial intelligence will be much developed and Internet of Things(IoT) will be more of a reality. Finally, all these is able because of the Fourth Industrial Revolution.

Authored by Jasper Tetteh Ahafianyo

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